The Weekly Closeout: Kim Kardashian launches new skincare line and GameStop’s losses spike
It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week and what we’re still thinking about.
From retailers showing support for LGBTQ Pride Month to Denny’s clothing merch, here’s our closeout for the week.
What you may have missed
Kim Kardashian launches Skkn by Kim skincare line
Almost a year after Kim Kardashian announced she would be shutting down her KKW Beauty brand, the reality TV star is launching a skincare brand with beauty giant Coty. Dubbed Skkn by Kim, the line will go live on June 21 and will only be available via the brand’s website, skknbykim.com, according to a press release. Skkn by Kim consists of nine products, including a cleanser, toner, exfoliator, face cream and eye cream. The collection also offers two serums and two oils.
The brand’s DTC website will feature tutorials and special collections and will also be “the go-to destination for all new product launches,” according to the release. Coty and Kardashian are aiming for sustainability with the new brand — each product uses refillable packaging and refills are sent inside eco-friendly materials. An Instagram post on the KKW Beauty account now pushes shoppers to the new Skkn by Kim line.
“[E]ach product was thoughtfully formulated to care for all skin types, tones, and textures at every stage of maturity,” the company said. “Through active ingredients and technical formulas, Skkn by Kim offers clinically proven skincare solutions to support the skin’s natural abilities and revitalize the complexion.”
Kardashian also operates in the shapewear space with her brand, Skims, which launched in 2019 and was renamed after backlash to the original name, Kimono Solutionwear. That line is now sold at Nordstrom.
Ikea pops up at Showfields’ Miami location
Ikea this week launched an outdoor concept dubbed “SunRoom” in which the retailer brings its memorable showroom to Showfields’ Miami location.
Marking the first installation in Showfields’ outdoor space at its Miami store, Ikea is showcasing its newest range of outdoor furniture through dining, seating, sofa, lounge and entertainment areas, according to details emailed to Retail Dive.
The space opened to the public on Thursday and will run through June 14.
Walmart and Gap Home launch kids line
About a year after announcing their partnership, Walmart and Gap are introducing a home line for kids. Launching exclusively on Walmart’s website, the collection will include over 200 items across bedding, bath, pillows, throws, rugs and window treatments.
The collection, which is priced between $20 and $79, is in part a way for Walmart to expand its assortment of home goods “at an incredible value,” the company said in an announcement.
The two retailers initially announced their partnership in May 2021 with a collection featuring bedding, home decor and bath products. The companies extended their ties in the fall with the launch of a furniture collection.
Lands’ End and Draper James release their last collection together
Lands’ End and Reese Witherspoon’s Draper James brand this week released the fourth and final collection from their collaboration, an inclusive-sized assortment of women’s, men’s and children’s apparel and swimwear in regular, petite, plus, big and tall, and extended children’s sizes.
The items, sold via Lands’ End stores and its website and four Draper James locations and its website, are priced between $15.95 and $144.95, according to a Lands’ End press release. Some proceeds will benefit Girls Inc.
The release comes at a tough time for apparel retail. But Lands’ End reported Q1 results that met its profit expectations “despite the ongoing global supply chain challenges, changing consumer landscape and difficult macroeconomic conditions,” the retailer said in a press release.
Net revenue in the quarter fell 5.5% to $303.7 million, and the company swung into the red, with a net loss of $2.4 million from last year’s net income of $2.6 million.
Gross margin contracted by about 350 basis points to 42.5%, declining year over year by an incremental $13.6 million of transportation costs, due to global supply chain challenges.
GameStop’s sales, losses spike
GameStop’s first-quarter sales grew by about 8% in the first quarter, beating analyst estimates, while its operating loss more than tripled to $153.7 million and its earnings missed forecasts. The gaming retailer said that new and expanded brand relationships contributed to its growth in Q1.
The company has been spending on inventory to boost in-stock levels and hedge against supply chain disruption. It has also been investing in new technology ventures, including a recently launched digital wallet to allow gamers to send, receive, store and use cryptocurrency and non-fungible tokens, and which sets the stage for the company’s forthcoming NFT marketplace. It is also still hiring personnel with expertise in blockchain, e-commerce and other tech-oriented areas.
In an emailed note, Jefferies analysts pointed to GameStop’s progress over the past 12 months on “customer focus, offering depth, competitive pricing, and improved fulfillment speed, services, and experiences.” At the same time, the analysts noted that some investors they’ve spoken with are “skeptical of the poor economics of the legacy business and growth focused cash-burn” at GameStop.
Get your Denny’s order with a shortstack of merch
They say breakfast is the most important meal of the day, so it follows that breakfast merchandise is the most important merch money can buy.
People have opinions about breakfast: There are savory breakfast fans and there are sweet breakfast fans. There are no breakfast fans and there are breakfast for dinner fans. There are fans of IHOP and presumably, in some corner of the world, there are fans of Denny’s. To cater to that group — or anyone that loves a good pancake — Denny’s on Thursday rolled out a new merchandise shop, DinerDrip.com.
Some highlights: A Denny’s mug that allows shoppers to choose the time of day they usually frequent the diner (college kids say thank you for the pitch black option); a Denny’s branded rolling pin; a $150 (!) jean trucker jacket; and a self-described “Live Laugh Fluff” pancake-themed apparel range featuring sweatshirts, sweatpants and a fuzzy bucket hat.
Denny’s recommended the line for Father’s Day, but a “Live Laugh Fluff” item sounds like the perfect secret Santa gift for that family member that always gives you trite inspirational sayings for the holidays.
Simon outlet malls’ answer to Amazon’s Prime Day
Taking a page from Amazon’s Prime Day sales tactic, Simon Property Group this week announced its first “National Outlet Shopping Day” at 90 outlet malls, and, like Prime Day, it will happen on more than one day – June 11 and 12.
Shoppers at 90 Simon Premium Outlets and Mills in the U.S. “will have access to exclusive deals, fantastic finds, and giveaways all weekend long with special offers from brands they love,” the mall REIT said in a press release.
Those brands include a few now owned by Simon itself, including Aéropostale Factory, Brooks Brothers Factory and Forever 21, as well as Reebok, a brand run by Sparc Group, which is co-owned by Simon and Authentic Brands Group.
To entice shoppers to the event, the company is sponsoring an “Ultimate Power Shopper Giveaway,” with a grand prize valued at $75,000, that includes a VinFast VF 8, an electric SUV from Vietnamese company Vingroup that was released in the U.S. this year, and a $20,000 shopping spree at any Simon Premium Outlets or Mills of their choice.
What we’re still thinking about
Last year, some 1,250 garment workers in Thailand were laid off when a factory closed. Since then, they and labor groups have been fighting for severance they say was legally owed to them. The workers — who made bras for Victoria’s Secret, Lane Bryant and Torrid — recently won an $8.3 million settlement for severance, which Worker Rights Consortium’s Scott Nova called the largest case of wage theft and now back pay that the group has ever seen.
Financing the settlement is Victoria’s Secret, which made a loan to the workers’ former employer, Clover Group. The Worker Rights Consortium called the brand’s settlement financing “historic” and “the most any brand has ever contributed to help resolve a wage theft case.”
A spokesperson for Victoria’s Secret noted its products were not being made at the time of the closure and layoffs but that “we were committed to ensuring the factory owners satisfied their obligation to their workers.”
That’s how much annual revenue Levi’s wants to be raking in five years from now, and it doesn’t plan on getting there through its iconic blue jeans alone. The 170-year-old brand is working to diversify its portfolio “across geographies, categories, genders and channels.” Among its ambitions is to double revenue from its women’s and tops categories.
The company is also investing in its direct-to-consumer channel — i.e., its stores, online and other digital capabilities — in hopes of tripling e-commerce sales and drawing 55% of its revenue from DTC by 2027.
While CEO Chip Bergh said that the Levi’s eponymous brand is “by far our single biggest asset as a company” and stronger than ever, diversification “gives us some shock absorbers in these times of macro uncertainty.” Recent work toward diversifying includes last year’s acquisition of Beyond Yoga and a resurgence of the Dockers workwear brand.
What we’re watching
Retailers show support during LGBTQ Pride Month
This week marks the start of LGBTQ Pride Month — a time to celebrate the LGBTQ community, as well as protest in support of equal rights. This also marks the start of a barrage of LGBTQ “support” from retailers, usually in the form of a limited-edition rainbow product.
The corporatization of Pride Month has become an issue so commonly discussed that it’s become a meme. Each year, Pride Month ads and rainbow products from retailers are criticized for their surface-level support. Even Tesla founder Elon Musk posted a meme about this phenomenon on Twitter, only to be accused that his own company has previously done similar practices.
ain’t this u https://t.co/9mZTaij6uH pic.twitter.com/cybLm2mw1X
— matt (@mattxiv) May 31, 2022
Some retailers prove their support better than others, and it’s becoming more important to identify what brands are enacting dedicated and specific support for the LGBTQ community.
A few brands have decided to publicly speak out against specific legislation in the U.S. that matters to the LGBTQ community. Lush Cosmetics has launched a gold and glittery soap bar with the phrase “Gay is OK” on it, according to a press release. The launch is in response to a controversial law passed in Florida, which restricts classroom lessons on gender and sexual identity, which many LGBTQ advocates have labeled the “Don’t Say Gay” bill. The bar of soap is available in all Lush Cosmetics stores in Florida and online, with the goal of raising $50,000 for Equality Florida, a civil rights organization dedicated to securing full equality for Florida’s LGBTQ community, per the release.
The Body Shop has also come out against this same bill with a product campaign, a landing page to fill out a petition in support of the Equality Act and a financial contribution of up to $10,000 to the organization Advocates for Youth, according to a press release shared with Retail Dive. The contribution is based on the sales of its limited-edition Out for Love highlighter.
Luxury fashion group Capri Holdings announced the creation of the Versace Foundation in connection with Pride month, pledging $10 million to “fostering, promoting and supporting programs, projects and activities designed to generate awareness of and support for the LGBTQIA+ community,” according to a press release. Specific projects have not been announced yet.
Apparel brand Dockers has released a Say It Loud Pride collection designed by a local San Francisco artist this year. There is no donation to an LGBTQ organization tied to the sale of this collection, but the company has donated to The Stonewall Community Foundation separately, according to comments emailed to Retail Dive via a spokesperson. Dockers is part of the Levi’s Strauss & Co. portfolio, which makes an annual donation of $100,000 to OutRight Action International. Levi’s has also released a clothing collection for Pride this year.
The question for retailers trying to navigate the waters of demonstrating their support in authentic and beneficial ways is a simple one: What matters to LGBTQ consumers?
During LGBTQ Pride Month last year, the retail app Shopkick surveyed over 2,700 LGBTQ+ community members across the U.S. to answer that question. The results showed that 38% of respondents want to support brands that align with their personal values, and about a quarter of respondents said they want to support brands who publicly support LGBTQ issues.
Twenty-five percent of respondents said the best way brands can relay their LGBTQ support authentically is through donations, and 22% said the best way was by publicly expressing support year-round. Brands should also care about how they express support even in their company’s workplace, as 21% of respondents said they think publicly enforcing non-discrimination policies is most important.